Financial Literacy and Retirement Planning in View of a Growing Youth Demographic: The Russian Case
AbstractOur study contributes to the financial literacy literature by examining its association with retirement planning in an interesting and novel context, i.e. that of a country with a relatively old and rapidly ageing population, large regional disparities and a rapidly emerging financial market. Even though consumer borrowing is increasing very rapidly in Russia, we find that only 36.3% of respondents in our sample know about the working of interest compounding and only half can answer a simple question about inflation. In a country with pervasive public pension provision, we find that financial literacy is significantly and positively related to retirement planning using private pension funds and schemes. Residents in rural areas are much more reliant on the public provision and invest less in private schemes and savings. The results of our study have a clear policy implication; along with encouraging the availability of private retirement plans and financial products, efforts to improve financial literacy can be pivotal to the expansion in the use of such schemes.
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Bibliographic InfoPaper provided by Center for Research on Pensions and Welfare Policies, Turin (Italy) in its series CeRP Working Papers with number 114.
Length: 39 pages
Date of creation: Mar 2011
Date of revision:
Financial literacy; Retirement Planning; Pensions; Russia;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-04-16 (Economics of Ageing)
- NEP-ALL-2011-04-16 (All new papers)
- NEP-CIS-2011-04-16 (Confederation of Independent States)
- NEP-TRA-2011-04-16 (Transition Economics)
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- Antonia Grohmann & Roy Kouwenberg & Lukas Menkhoff, 2014. "Financial Literacy and Its Consequences in the Emerging Middle Class," Kiel Working Papers, Kiel Institute for the World Economy 1943, Kiel Institute for the World Economy.
- Xu, Lisa & Zia, Bilal, 2012. "Financial literacy around the world : an overview of the evidence with practical suggestions for the way forward," Policy Research Working Paper Series, The World Bank 6107, The World Bank.
- Rekha Reddy & Miriam Bruhn & Congyan Tan, 2013. "Financial Capability in Mexico : Results from a National Survey on Financial Behaviors, Attitudes, and Knowledge," World Bank Other Operational Studies 16756, The World Bank.
- Enrique Marshall & Cristóbal Kaufmann, 2013. "Acceso de los Jóvenes a los Servicios Financieros: Realidades y Desafíos," Economic Policy Papers Central Bank of Chile, Central Bank of Chile 46, Central Bank of Chile.
- Ashok Thomas & Luca Spataro, 2013. "Pension funds and Market Efficiency: A review," Discussion Papers, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy 2013/164, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
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